Financial Crisis and Sectoral Diversification of Argentine Banks, 1999-2004

Ricardo Bebczuk () and Arturo Galindo
Authors registered in the RePEc Author Service: Arturo José Galindo

Department of Economics, Working Papers from Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata

Abstract: We explore the impact and evolution of loan portfolio diversification during the 2001-2002 Argentine financial crisis. Using a novel dataset that combines public information on the main activity of the largest 930 Argentine firms with their borrowing from each bank operating in the country during the 1999-2004 period, we find that banks did not modify much their loan portfolio mix as a response to the crisis, even though the econometric results point to a positive effect of sectoral diversification and lending to tradeable sectors on bank profitability and risk mitigation. Our results suggest that larger banks benefit more from diversification that smaller ones, and that the benefits of diversification are greater during the downside of the business cycle.

Keywords: Focus; Diversification; Bank risk; Bank return. (search for similar items in EconPapers)
JEL-codes: G20 G21 G28 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2005-09
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Related works:
Journal Article: Financial crisis and sectoral diversification of Argentine banks, 1999-2004 (2007)
Working Paper: Financial Crisis and Sectoral Diversification of Argentine Banks, 1999-2004 (2005)
Working Paper: FINANCIAL CRISIS AND SECTORAL DIVERSIFICATION OF ARGENTINE BANKS, 1999-2004 (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:lap:wpaper:060

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